Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

Option valuation as an expectation in the complex domain: The Black-Scholes case

It is very well known that the first succesful valuation of a stock option was done by solving a deterministic partial differential equation (PDE) of the parabolic type with some complementary conditions specific for the option. In this approach, the randomness in the option value process is eliminated through a no-arbitrage argument. An alternative approach is to construct a replicating portfolio for the option. From this viewpoint the payoff function for the option is a random process which, under a new probabilistic measure, turns out to be of a special type, a martingale. Accordingly, the value of the replicating portfolio (equivalently, of the option) is calculated as an expectation, with respect to this new measure, of the discounted value of the payoff function. Since the expectation is, by definition, an integral, its calculation can be made simpler by resorting to powerful methods already available in the theory of analytic functions. In this paper we use precisely two of those techniques to find the well-known value of a European call

Option valuation as an expectation in the complex domain: The Black-Scholes case

It is very well known that the first succesful valuation of a stock option was done by solving a deterministic partial differential equation (PDE) of the parabolic type with some complementary conditions specific for the option. In this approach, the randomness in the option value process is eliminated through a no-arbitrage argument. An alternative approach is to construct a replicating portfolio for the option. From this viewpoint the payoff function for the option is a random process which, under a new probabilistic measure, turns out to be of a special type, a martingale. Accordingly, the value of the replicating portfolio (equivalently, of the option) is calculated as an expectation, with respect to this new measure, of the discounted value of the payoff function. Since the expectation is, by definition, an integral, its calculation can be made simpler by resorting to powerful methods already available in the theory of analytic functions. In this paper we use precisely two of those techniques to find the well-known value of a European call

Análisis de una experiencia de aprendizaje basado en proyectos en la asignatura de Fundamentos de Física = Project based learning: analysis of an experience in Introductory Physics courses

In this work we present and analyze the application of an experience of Project Based Learning (PBL) in the matter of Physics II of the Industrial Design university degree (Girona University) during 2005-2006 courses. This methodology was applied to the Electrostatic and Direct Current subjects. Furthermore, evaluation and self evaluation results were shown and the academic results were compared with results obtained in the same subjects applying conventional teaching methods

Sacral fusion as an aid in age estimation

The degree of fusion at the anterior aspect of the sacral vertebrae has been scored in 242 male and female skeletons from the Lisbon documented collection, ranging in age from 16 to 59 years old. Statistical tests indicate a sex difference towards earlier fusion in young females compared with young males, as well as a clear association between degree of fusion and age. Similar results have been found in documented skeletal samples from Coimbra and Sassari, and the recommendations stated by these authors regarding age estimation have been positively tested in the Lisbon collection. Although more research from geographically diverse samples is required, a general picture of the pattern of sacral fusion and its associations with age and sex is emerging. We also provide a practical example of the usefulness of the sacrum in age estimation in a forensic setting, a mass grave from the Spanish Civil War. It is concluded that the scoring of the degree of fusion of the sacral vertebrae, specially of S1-2, can be a simple tool for assigning skeletons to broad age groups, and it should be implemented as another resource for age estimation in the study of human skeletal remains.

El canto coral y las orquestas infantiles, una educación en valores = Choir singing and children’s orchestras, an education in values

This article looks at the musical activity carried out at Palafrugell Music School as a musical education centre over the past forty years. After giving a brief description of the work carried out there by vocal and instrumental groups, the article analyses and offers examples and tangible motives that use activities to show that forming part of a coral or instrumental group helps personal development and promotes the acquisition of habits, alongside musical training and learning. In short, an education in values

Collusion and fights in an experiment with price-setting firms and production in advance

We present results from 50-round market experiments in which firms decide repeatedly both on price and quantity of a completely perishable good. Each firm has capacity to serve the whole market. The stage game does not have an equilibrium in pure strategies. We run experiments for markets with two and three identical firms. Firms tend to cooperate to avoid fights, but when they fight bankruptcies are rather frequent. On average, pricing behavior is closer to that for pure quantity than for pure price competition and price and efficiency levels are higher for two than for three firms. Consumer surplus increases with the number of firms, but unsold production leads to higher efficiency losses with more firms. Over time prices tend to the highest possible one for markets both with two and three firms.

A change would do you good . . . An experimental study on how to overcome coordination failure in organizations

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In an initial phase, the benefits of coordination are low relative to the cost of increased effort. Play in this initial phase typically converges to an inefficient outcome with employees failing to coordinate at high effort levels. The experimental design then explores the effects of varying the financial incentives to coordinate at a higher effort level. We find that an increase in the benefits of coordination leads to improved coordination, but, surprisingly, large increases have no more impact than small increases. Once subj

An input-output analysis of the "key" sectors in CO2 emissions from a production perspective: an application to the spanish economy

Here we present an approach that allows the identification of the "key" productive sectors responsible for CO2 emission. For this purpose, we develop an input–output methodology from a supply perspective. We focus on the impact of an increase in the value-added of the different productive sectors on total CO2 emissions and we identify the productive sectors responsible for the increase in CO2 emissions when there is an increase in the income of the economy. The approach shows the contribution of the various sectors to CO2 emission from a production perspective and allows us to identify the sectors that deserve more consideration for mitigation policies. This analysis is complementary to the input–output analysis from a demand perspective. The methodology is applied to the Spanish economy.

Economic impacts of alternative water policy scenarios in the Spanish production system: an input-output analysis

The objective of this paper is to analyse the economic impacts of alternative water policies implemented in the Spanish production system. The methodology uses two versions of the input-output price model: a competitive formulation and a mark-up formulation. The input-output framework evaluates the impact of water policy measures on production prices, consumption prices, intermediate water demand and private welfare. Our results show that a tax on the water used by sectors considerably reduces the intermediate water demand, and increases the production and consumption prices. On the other hand, according to Jevons' paradox, an improvement in technical efficiency, which leads to a reduction in the water requirements of all sectors and an increase in water production, increases the amount of water consumed. The combination of a tax on water and improved technical efficiency takes the pressure off prices and significantly reduces intermediate water demand. JEL Classification: C67 ; D57 ; Q25. Keywords: Production prices; Consumption prices; Water uses; Water policy; Water taxation.

An Analysis of black-box optimization problems in reinsurance: evolutionary-based approaches

Black-box optimization problems (BBOP) are de ned as those optimization problems in which the objective function does not have an algebraic expression, but it is the output of a system (usually a computer program). This paper is focussed on BBOPs that arise in the eld of insurance, and more speci cally in reinsurance problems. In this area, the complexity of the models and assumptions considered to de ne the reinsurance rules and conditions produces hard black-box optimization problems, that must be solved in order to obtain the optimal output of the reinsurance. The application of traditional optimization approaches is not possible in BBOP, so new computational paradigms must be applied to solve these problems. In this paper we show the performance of two evolutionary-based techniques (Evolutionary Programming and Particle Swarm Optimization). We provide an analysis in three BBOP in reinsurance, where the evolutionary-based approaches exhibit an excellent behaviour, nding the optimal solution within a fraction of the computational cost used by inspection or enumeration methods.

Spotting Translationese in two Corpora of Original and Translated Catalan Texts: an Empirical Approach

This research investigates the phenomenon of translationese in two monolingual comparable corpora of original and translated Catalan texts. Translationese has been defined as the dialect, sub-language or code of translated language. This study aims at giving empirical evidence of translation universals regardless the source language.Traditionally, research conducted on translation strategies has been mainly intuition-based. Computational Linguistics and Natural Language Processing techniques provide reliable information of lexical frequencies, morphological and syntactical distribution in corpora. Therefore, they have been applied to observe which translation strategies occur in these corpora.Results seem to prove the simplification, interference and explicitation hypotheses, whereas no sign of normalization has been detected with the methodology used.The data collected and the resources created for identifying lexical, morphological and syntactic patterns of translations can be useful for Translation Studies teachers, scholars and students: teachers will have more tools to help students avoid the reproduction of translationese patterns. Resources developed will help in detecting non-genuine or inadequate structures in the target language. This fact may imply an improvement in stylistic quality in translations. Translation professionals can also take advantage of these resources to improve their translation quality.

Effects of math anxiety on student success in higher education

This study examines whether math anxiety and negative attitudes toward mathematics have an effect on university students" academic achievement in a methodological course forming part of their degree. A total of 193 students were presented with a math anxiety test and some questions about their enjoyment, self-confidence and motivation regarding mathematics, and their responses were assessed in relation to the grades they had obtained during continuous assessment on a course entitled"Research Design". Results showed that low performance on the course was related to math anxiety and negative attitudes toward mathematics. We suggest that these factors may affect students" performance and should therefore be taken into account in attempts to improve students" learning processes in methodological courses of this kind.

In what ways a CLIL lesson planning different from an EFL course plan ?

Des del 1995 el Consell Europeu ha promogut l’aprenentatge d’una segona llengua a través d’una altra àrea en el que coneixem per CLIL (Contingut i Llengua Integrats en l’Aprenentatge) o en altres paraules: “una activitat en la qual l’aprenentatge d’una llengua estrangera és utilitzada com una eina per l’aprenentatge d’una àrea no linguística en la qual llengua i contingut tenen un mateix paper” (Marsh, 2002). Tot I així, “ensenyar una àrea a través d’una llengua estrangera no és el mateix que la integració de llengua i contingut”. CLIL comporta altres implicacions metodològiques pel que fa a la planificació, estratègies didàctiques i particularment al rol del docent. De fet, són aquests factors els que componen l’èxit o el fracàs en l’implementació de CLIL. i per aquest motiu pretenc analitzar i descriure les diferències entre una sessió de CLIL i una de llengua anglesa. Aquesta investigació és un estudi de cas que vol oferir una mirada a les diferències entre una unitat de CLIL i una de llengua anglesa portades a terme en un grup de 3r de primària a l’escola de Sant Miquel dels Sants (Vic) pel que fa a la planificació, les estratègies i actuacions del docent.

An Analysis of Eye Scanpath Entropy in a Progressively Forming Virtual Environment

A sign of presence in virtual environments is that people respond to situations and events as if they were real, where response may be considered at many different levels, ranging from unconscious physiological responses through to overt behavior,emotions, and thoughts. In this paper we consider two responses that gave different indications of the onset of presence in a gradually forming environment. Two aspects of the response of people to an immersive virtual environment were recorded: their eye scanpath, and their skin conductance response (SCR). The scenario was formed over a period of 2 min, by introducing an increasing number of its polygons in random order in a head-tracked head-mounted display. For one group of experimental participants (n 8) the environment formed into one in which they found themselves standing on top of a 3 m high column. For a second group of participants (n 6) the environment was otherwise the same except that the column was only 1 cm high, so that they would be standing at normal ground level. For a third group of participants (n 14) the polygons never formed into a meaningful environment. The participants who stood on top of the tall column exhibited a significant decrease in entropy of the eye scanpath and an increase in the number of SCR by 99 s into the scenario, at a time when only 65% of the polygons had been displayed. The ground level participants exhibited a similar decrease in scanpath entropy, but not the increase in SCR. The random scenario grouping did not exhibit this decrease in eye scanpath entropy. A drop in scanpath entropy indicates that the environment had cohered into a meaningful perception. An increase in the rate of SCR indicates the perception of an aversive stimulus. These results suggest that on these two dimensions (scanpath entropy and rate of SCR) participants were responding realistically to the scenario shown in the virtual environment. In addition, the response occurred well before the entire scenario had been displayed, suggesting that once a set of minimal cues exists within a scenario,it is enough to form a meaningful perception. Moreover, at the level of the sympathetic nervous system, the participants who were standing on top of the column exhibited arousal as if their experience might be real. This is an important practical aspect of the concept of presence.